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California Legal Requirements: Things to Do when Hiring

Becoming an employer in California is a big step for many solopreneurs, sales and service providers.

Once you go from working with contractors to becoming an employer by hiring an employee, here is list of things that I recommend on the must-do list. It’s not comprehensive but should give employers-to-be a nice start.

What forms do I need, and where do I get them?

DE 1, Registration Form: After paying over $100 in wages in a calendar quarter, fill out a DE 1 to receive an EDD employer account number. Certain types of businesses - agricultural, government, nonprofit, schools and those that only have to withhold PIT - have special registration forms.

DE 34, Report of New Employee(s): To notify EDD of each new employee’s name, address, social security number and start-to-work date.

DE 9, Quarterly Contribution Return and Report of Wages: To report the total subject wages and UI/ETT/SDI/PIT taxes due for each quarter and reconcile the taxes due with the tax deposits paid during the quarter.

DE 9C, Quarterly Contribution Return and Report of Wages (Continuation): To report all employees, their subject wages, PIT wages and PIT withheld.

When are the forms and taxes due?

DE 1: Due within 15 days of paying over $100 in wages in a calendar quarter.

6) Set up a payroll system/figure out how to otherwise pay employees so that you deduct the proper amount of taxes from each paycheck, etc. You might also consider a full service payroll system that will help figure out all of that for the company and indemnify it for wrong taxes. This will also ensure that employees receive what you are legally required to provide them, such as an accurate W-2 at the end of the year.